State owned power producer Kenya Electricity Generating Company Plc (KenGen) will begin direct sales of power to customers as soon as regulations are ready to enforce the Energy Act.
“The Energy Act 2019 has provision for us to sell power directly especially to large consumers. What is pending are the regulations of how that would be undertaken and how the infrastructure would be based. We are certain that when the regulations are ready, that possibility will be there,” KenGen CEO and MD Ms Rebecca Miano said.
When that will happen, it will end the close to 100 years of electricity distribution monopoly held by Kenya Power & Lighting Company Plc (KPLC)
The firm’s target on the large customers which account for over half of KPLC’s electricity sales revenues may present a future challenge for the electricity distributor now facing huge financial constraints.
President Uhuru Kenyatta signed the Energy Act in March 2019 into law but the regulations allowing other companies to apply for retail licences to sell electricity are yet to be set up.
The law under Section 140 compels KPLC to “provide non-discriminatory open access to its distribution system for use by any licensee, retailer or eligible consumer,” but is silent on what charges should be levied for such access.
That law also specifies that the distribution lines will remain property of KPLC even after a licensee pays fees to the firm to use the infrastructure.
The Ministry of Energy, which is expected to champion the development of the regulations, has however maintained that although the law has provided for an alternative distributor of electricity, the new distributors would require investments in infrastructure which may prove counterproductive in areas already being supplied.
KenGen will need a distribution licence and rely largely on the network built by the Kenya Electricity Transmission Company (Ketraco) which it currently evacuates power from its generating plants.
“A new power distributor would require new assets and thus there may be expensive duplication of roles,” Energy Cabinet Secretary Charles Keter recently affirmed.
KenGen which contributes to over 70 percent of electric energy supply to the single off-taker has in previous occasions hinted at a scheme that would involve supply of power to the upcoming industrial park in Olkaria, Naivasha and then scale it up to some unnamed parts of the country.
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